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Difference between DRHP RHP and prospectus?
DRHP (Draft Red Herring Prospectus): This is the first document that a company submits to the regulatory authorities (e.g. SEBI) for approval before going public. It contains detailed information about the company’s business, financial position, and operations but does not specify the price or number of shares offered.
RHP (Red Herring Prospectus): The RHP is an updated version of the DRHP. Once the DRHP is reviewed and approved by SEBI, the company submits the RHP. It contains most of the information about the company but does not yet indicate the final price or number of shares. The RHP is used to market the IPO to investors.
Prospectus: After receiving final approval from SEBI, the company issues the prospectus. This is the official document that contains all the necessary information, including the final price, number of shares, and other important details of the IPO. Its purpose is to provide complete information to investors before they buy shares.
Purpose: The DRHP serves as a preliminary document for approval and marketing, the RHP helps investors evaluate the company with most of the details (except the price and number of shares), while the prospectus contains the final, complete information required for investment decisions.
